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tv   Market Makers  Bloomberg  June 24, 2014 10:00am-12:01pm EDT

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>> this is a bloomberg exclusive. a bipartisan group warned that the u.s. is in for deadly flooding and dangerous heat if something is not done about global warming. we will talk to one of those behind a startling new report. polaroid wants you to get the picture. the company is a lot more than
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those instant cameras these days. we will be talking to the polaroid ceo. welcome to "market makers anarcho --." erik schatzker will be here with us shortly. before we take you to mid town manhattan, we have to take you out to the newsroom with some breaking economic eta. here is michael mckee. >> hold onto your hat. we have a holy cow number out. the expectation was for a small increase, new home sales go up 18 .6%. this is in the month of may. this puts us at a 500-4000 annual sales pace. billed as a been telling us that they have been growing more confident about people coming into the market. this seems to support that view. much of the increase in the northeast and in the south, we
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saw it increase all across the nation. housing seems to be back after the big increase in existing home sales. these numbers will increase the amount of supply out there. the number of homes for sale is not changing. consumer confidence is up. there is a chance of those things go together. from 83er goes to 85.2 even. to 82.2.vised down that is three points and a better-than-expected. some really good economic news to start your show, stephanie. that while, for holy cow number, michael mckee. i want to take you to erik schatzker. he is standing by with hank paulson. they are speaking about climate change. >> i am here in midtown with the
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former secretary of the treasury paulson. we have known about the relationship between carbon dioxide and atmospheric warming since before the second world war. many people do not realize that. scientists have been predicting climate change for 50 years. research is overwhelmingly conclusive. i know you share that opinion. nothing has been done. plan.rld needs an action give me three practical steps that we can take to deal with this problem now. short term is the enemy we all face. it clearly is. we face in all facets of life. we face it on a wall street and in washington. steps that i think have come out of the study we the firstsed is
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attempt and i think it is a good one to quantify the risk that climate has to our economy. the steps that come out of that are things that i think business needs to do. study.ll be a it is a first attempt. arethe first time, we quantifying the risk. risk andthe immediate not just the most reasonable cases, but the outside risks. the really perverse outcomes. what i would call the big risks. demand thated to businesses make disclosures.
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make disclosures about the risks. make disclosures about carbon emissions. make disclosures about the risk of stranded assets. secondly, i think business leaders in the united states are the best i have ever seen. u.s. companies are the best managed companies in the world. u.s. businesses need to lead on this issue. the investments they are making today are going to have a lot to do with our economic future. businesses need to do more in terms of investing in resilience. we need toantly, take out a national insurance policy. we need the federal government to take action. and city, businesses
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governments are way ahead of the national government. businesses need to do a better job of lobbying and pressing the national government to put the kinds of policy in place that would let us avoid the most adverse outcomes. >> transparency, disclosure, business leadership, a national insurance policy. you cochair to the risky with michael bloomberg. you talk about the quantification of economic risk. put it in blunt terms. if this country does not take action on climate change, what happens? >> i think it can be catastrophic. the risks and the costs are already baked into the
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system as it were. adversevoid the most outcomes. really averse are in terms of the impact that they can have in the environment in which we live and on our economy. the real value of this report. this report does not say that this is the most likely outcome. this report looks at best cases and worst cases and uses modeling to really understand the rest. >> the worst-case scenarios are in the hundreds of billions of dollars. >> very much so. timee maintained for some that there really is
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unpredictability. are of these outcomes centuries from now coming much sooner. but scientists are doing, they are very conservative and looking at facts. extrapolating historical data. we are living in a new world with man-made co2. just take a couple of examples. 15 years ago, scientists were predicting that the polar ice caps might melt at the end of the century. this in theeeing next decade or two. who knows what they will be forecasting 10 years from now. i think when you're dealing with something that is unpredictable, you need to take out an insurance policy. >> what about the political
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question mark? if you asked the republicans how much do you believe in climate change, none of of the hands would go up. how do you create a safe space for these people to participate in the discussion about solutions? let me again with the fact in the study that we just did. this is bipartisan. we have two republican former treasury secretaries and a democrat. we have republicans and democrats and we agree that there is a common problem. we may disagree on some of the solutions, but we believe there is a common problem. that is where you need to start. i am a part -- proud member of the republican party.
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i know many republicans in business and in government that want a fact-based discussion of this. is going lot of this to start with the american people. when it takes to get congress to act and what it takes to get our national government to act is for the american people to demand it. what do you do in the interim? let's take marco rubio as an example. he has a promising future. he changed hise, position on climate change. he says he does not believe in it. what do you say to senator rubio? what do you say to all of these people who for the time being ?re in office
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-- i willam doing tell you what i am doing -- i think actions speak louder than words. paulson institute. i spend a lot of time in china. chinas going to happen in is going to drive economic and environmental outcomes all over the world. >> do the chinese get this? >> they get it. i think americans get this. and the young americans get this. i think the chinese have an urgent need to deal with dirty air. it is killing people. there is a great opportunity for our two countries to work together. only if they work together are we going to be able to solve this problem. the u.s. needs to lead. in terms of what i am doing in the u.s., i am supporting the
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study. this study is not aimed at the broader american population. this is aimed largely at the business community. it quantifies the risk and we are going to try to energize the business community to put more pressure on federal officials do give them more cover to the sorts of things that they will need to do. approach that one support,the one that i some way of pricing carbon and change behavior. i think that is what it takes to change behavior. others would have a different approach. >> part of the problem here is a lack of incentives. why would anybody not build a beach house on a piece of sand if the government will pay for
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you to build up after a hurricane? how do you incentivize people to change behavior? >> let's come back to incentives. oppose the people who changing the national incentives, that believe that a carbon tax is all about the government, are missing the point altogether. it is rather perverse. here, they areg guaranteeing that the government is going to have to come in repeatedly. when we have a hurricane or a flood or a killer tornado or a fire or a drought what happens? the national government comes in. that is the role of the national government. we all pay. that is a recipe for bigger government. that is a very large hazard.
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>> is there a way of achieving without a change in government policy? born?et-based solution >> there are a lot of things we could do. there is not a one-size-fits-all. there are risks that are very immediate. what is a whole lot of businesses should be doing. they want to minimize the damage that is going to come from the and thend the storms debts. >> that does not address the problem at its core. a very deals with immediate problem. we're going to need to take more extraordinary action. >> one less question. you spoke passionately about the work that you are doing.
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how do you reach the people whose minds you need to change? >> in terms of reaching the people whose minds we need to change thomas --, i have a lot of things i do well. i am not an order. or.orate what i think it is going to take to reach their minds is young people already care. just go to the universities. young people care. i think it is going to be very difficult for any politician over time to deny that climate change exists. there'll be so much tangible evidence in terms of the weather events, they will not be able to do that. that is not my concern. people wills acknowledge that it exists but
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won't be prepared to take the strong measures we need to take now to take out an insurance not only protect ourselves but our children and grandchildren from a very different world and one none of us would want to live in. >> thank you very much for your time. that was the former treasury secretary hank paulson. this was a passionate conversation about climate change. >> a fantastic conversation. thank you eric. thank you mr. paulson. alan mulally sits down with our own matt miller. it is a bloomberg exclusive. how polaroid it reinvented itself. it is not just instant cameras anymore. we will be speaking to the
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polaroid mc -- ceo. turcos "market makers ♪
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>> will come back to "arkham makers." getting the new -- apple will make the biggest iphone jet. one of the phones will have a 5.5 inch screen. the current iphone screen is just four inches. eight tc have a big screen phone on the market wants to go. now apple is getting in the game. if you like betting on long shots, you should apply for a summer job at morgan stanley. there is a 92 one chance you will get a job. they received 90,000 applications.
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only 1000 people were hired. people who say that young people don't want to banks, yes they do. is askingutin lawmakers to resent approval to use military force in the ukraine. he is traveling to vienna. he will meet with european officials and broker peace talks. daysmulally has just a few left as the ceo of ford. happy with his successor. with matt miller, he said this will not be the last we hear of him. he is part of that conversation. >> this team created not only lamp and then business review process. we have had wonderful success.
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this is served everybody well. i think mark is going to continue those processes going forward. >> will he do something different from what you did? you came here and it was a revolution. now the best thing for him to do in the eyes of the board would just be to continue your administration. does he have changes to make? they created the process and created the strategy. we are just getting started. we are serving all the markets around the world. we are restructuring europe and will be profitable there next year. brand the fastest-growing in asia pacific. there is a lot of growth for us. >> even though the end of the month is a fischel he -- officially -- how many more days?
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you have a sizable position in the company. i assume you'll be coming back once in a while. i will maintain many of the great relationships i have. ford is a great company. it is so important on what it does to the economy. i am going to say close to ford going forward. mark would like to call me and i said absolutely. >> what will you do after this month is over? i heard you say you have not given a lot of thought to it. >> i haven't spent much time on it. the focus that i have wanted to have is on this transition. not just a leadership team but also the strategy and the management system. we are going around the world and visited all of our operations and wonderful employees. i wanted to thank them and congratulate them and wish them the best and share with them that i have all the confidence
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in the world that ford will be fantastic going forward and they are part of something very special and i wish them the very best. >> the way you deal with a i remember pops up, when steve ballmer said he asked advice for microsoft. you can have a rectus advising other leaders. mark --?ibility is has know that the world lots of opportunities or service. now, i am focused on this transition of ford. i look forward to what the future might bring. i might get to talk to you every once in a while. >> will you take a couple of weeks off? like to do isd call you on july 2 and tell you what i am thinking about. i will probably call you from a
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starbucks. >> promise. >> matt is back from detroit. call you on july 2 from a starbucks? >> i don't know if that is where his favorite coffee is made or if he owns some shares in starbucks. about five or six times that if you want to know where i am, i will call you from starbucks. even mark field came on and said that allen will be at starbucks. >> there is a lot of talk. >> i don't think he is going to go there. it would be fascinating. the talk is he is going to run the veterans administration. that is a place they could really use the help of a guy like alan mulally. kind of problems
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that whoever goes there will fire everybody and start fresh. he did not fire everybody afford. he was able to get them. >> where would he have to live? >> he would probably continue to live in seattle and commute. i am sure he has earned the plane at this point. he has made $400 million. he owns more shares in four then bill ford. >> what are other possibilities? he has advised steve ballmer and president obama. he can kind of do anything. >> he says he has not given a lot of thought to it. i believe the things he says. he is very truthful. ofhis mind, not given a lot thought to something maybe thinking about it for a half an hour a day. he is working from 5:00 a.m. to 9:00 p.m.
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he doesn't sleep well. >> i don't. thank you. matt's exclusive with alan mulally. we will be back with more "market makers" in two minutes ♪
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>> live from bloomberg headquarters in new york, this is "market makers" with erik schatzker and stephanie ruhle. >> welcome back. i am stephanie ruhle. theirors are hungry and appetite is growing for m&a deals in the food industry. tyson foods announced it will acquire hill scheier brand for eight lien dollars. one of the largest takeover bids of the year. i want to bring in kevin dreier. he is here to tell us what the next big deal is in food. let's talk about hill scheier and tyson. price was $35 and ends
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up at 60. what is happening? analyst to their homework. it is a couple of things. we thought it was an undervalued company. we thought the valuation was attractive. there was a lot of synergy in the transaction. the company is going to do 550 million. you can pay a lot and create a transaction. >> how far away are we from looking at these companies as vice stocks. the food industry, this is highly processed food. it is filled with preservatives. michael bloomberg and said sugar is the new tobacco. that is packed into all these products. sodium and sugar.
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>> hill scheier has a lot of natural products. they are basically a meat company. highlyat company, it is processed and filled with preservatives. >> not all of their products. i would say the proteins is on trend with consumers right now. their brands have done a great job and that was part of the attraction. >> for those who missed the boat on this trade, what is next? >> looking more broadly at consumer products, part of what m&a trend ishis financial engineering and spinoffs and companies separating themselves. the pieces get acquired down the road. we saw that with hill scheier. that used to be fortune brand.
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several others going on. that may lead to more deals read energizer is not a food company, they are in the process of splitting themselves up. they are separating the battery their personal care division like schick razors. >> what is all this going to mean for consumers who are in the grocery store? how will this the affect the pricing of these products? >> i don't think it will affect things a lot of. a lot of them are on the backend. pricing power is part of the attraction of acquirers. it will give these when they are a food producer or a compact consumer products producer, they will get more leeway with
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retailers like walmart who have been beating them up for the last several years. >> is any this being driven by commodities prices? driven a little bit of the acquirers with the spread between chicken prices and feed harry and the profits are high. wherewithalm some to do an acquisition. it might be a good time to diversify. people are gasping and $8 billion price tag. was $20 billion. are there other big tickets? >> there could be. up, energizer splits itself
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11 or 12 billion. we will see what happens in that. that could be a split up candidate or a takeover candidate. general mills, for instance. they have a joint venture with nestle. maybe nestle will want to buy them and that would be a big deal. >> do they have any social responsibility at a time when see consumers are saying we more americans with the threat of obesity and diabetes. when things have tons of gluten or high fructose corn syrup, don't they have a responsibility to educate consumers? responsibility to their shareholders. there is a company that is a leader in gluten free right now.
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that is another stock that we own. they need to sell healthy items because that is what consumers want. they have to buy things that sell things that consumers will buy. they will be balancing those two things. general mills as whole-grain in serial. they sell yogurt. there are some healthy offerings. >> where does unilever said in all this? >> they are one of the leaders in personal care. they have been selling off a lot of their food brands recently. athink that they would be great potential acquirer for the personal care brands. it would fit like a glove. there could be others. thank you so much for joining us. given us the latest on personal care and food in the big m&a space. coming up, four years ago king
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james famously took his talents from ohio to miami. now the nba star may be taking those talents on the road. we will have that and more when we come back. stay with us. you're watching "market makers." ♪
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>> will come back. some breaking news in the world of basketball. espn is reporting that lebron james is opting out of his contract. he will be a free agent and could leave the miami heat after four seasons and for straight appearances in the nba finals. is king james really taken his talent out of south beach? i can't see him leaving miami. >> the surprise would be in this story if he paid.
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if he did not opt out that would be the surprise. he has two years and a $40 million left on his deal. the salary cap is going up. the maximum salary will go up. eating a longer-term deal and a higher annual salary. constituted and cannot add pieces to a team that lost in the finals. they can't add free agents. out, if dwyane wade opts out, if the big three opt out, -- >> duane and chris will follow. >> he will pressure those two guys to set you guys will take the salary hit. you're going to take a little bit less on your deal and get more years. we can upgrade the roster and win more championships.
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>> they are going to say yes? >> that is exactly what they will say. dwyane wade wants to be in miami. they will reward him with more years, a four-year deal. other franchises will not give that to a guy with his knees. his annual salary will shrink. going to makeot any sacrifices or compromises? >> he might take a sliver of a that. maybe he will take a sliver of a cut. it will not be a bigger number. help?s this hurt or >> carmelo anthony makes too much money. let him go to chicago or houston. lebron leaves miami, where would he go?
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everybody has to take a peek at lebron. he has three options. chicago may be the best option. they will want an answer quickly. has 24 say carmelo hours. he will have to wait until lebron it makes his decision. >> are you feeling like a sitting duck if you are carmelo anthony? >> he knew. there are not too many players that he could subjugate his ego for. you have no choice with lebron james. he knows he is plan b for everybody. they don't think it is going to happen. 97% he stayst at in miami. >> there is no chance he goes back to ohio? once you are the king of
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miami, you ain't going anywhere. >> there is a rookie coach in cleveland. it's just not a winning scenario right now. there are better scenarios to achieve lebron's goals. there is only one goal and that is to win. -- win win winen and get paid paid paid. >> this is zero surprise. >> the game of nba chess is in full effect. >> there is not another surprise in this announcement. let's see if the others take that pay cut. thought basketball was checkers, it is just. thank you so much for joining us.
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given us the latest on what is going on with king james in the nba. you may have had one of those instant cameras when you're growing up. now, polaroid is a lot more than that. we will be speaking with their ceo in just a few. ♪
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>> erik schatzker is back. everybody loves a comeback. did you ever wonder what happened to the polaroid brand? cameras that took photos of a spot. they are changing consumer concepts about what to do with their images after the catch them. we are joined by ceo of polar related scott hardy. i have loved polaroid cameras for years. anymoreon't use them because every picture i take is on a phone.
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what you doing to change that? >> there is a huge revival with as the photography. generation has never been exposed to the phenomenon of as the photography and taking a picture and seen it develop before your eyes. we are selling a lot of our instant analog cameras which print. they are being used at events and graduation parties. my daughter had a graduation party and we had on up and we did a photo booth and took analog photographs of all the people there and hung them on the close line. she took her phone and instagram pictures of the analog. >> i could see millenials having fun with a rotary dial phone as well. how you keep this from becoming a fad? a widere addressing
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ecosystem strategy. onare offering applications ios and android devices. we are developing android hardware. we are focused on the imaging and camera centricity. >> who is your audience? this is fun when they are at parties. how'd you get this involved in people's everyday lives? >> our audience is a female demographic. theave more success in traditional female shopping areas. how do you educate the consumer on what is out there? >> the big electronics brands ignore that audience? opportunityiche because they are not serving women as well as they should? >> absolutely.
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>> how are they missing it? >> we have 100% recognition in most markets around the world. we have dna that says all the right is about sharing. it is about fun. focusing on those core elements of who we are and what we stand for, we can offer products that interact with that demographic. >> what do you think about the massive success of instagram and snapchat? success ofe photography. we just opened a photo bar store. we have four in florida and one in las vegas. we will have 50 by next year. you go in and download from instagram, facebook, whatever social network you use, you can print in the store actual polaroid photographs.
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we are not just about printing. it is about product. you can have a frame. these are valuable to you. you can print them in the store to take home and put on your shelf or your wall. >> where in florida? >> that is where we started. we are curators of innovation. we can embrace new technology that comes our way. we had an entrepreneur that came to us and had a great idea. strategic hardship together. it has been a wild success. we just launched a franchise this week. >> two people have too much trouble printing photos at home? it is glossy instead of matte? >> it is about product. there are too many images being
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captured. are one billion photos being taken a year. showhose shots the matter, me your favorite photograph on your phone of your children, your family. what have you done with it? they will post it to instagram. >> i am afraid that my best images are in my phone and could be lost in the back of a cab at any moment. >> how do we liberate that? and roddick's that we mount on bamboo and metal. we have beautiful framed options. you could use them as art. >> can i ask how the franchise program works? is there a big appetite people who want to start these businesses? >> we have something that is
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very unique and differentiated. if you talk to people in retail right now, there are not a lot of new retail concepts. we have something that is unique and different. the cost of entry is not exorbitant. i think it makes it available to small business consumers. >> what did you learn working at dell and intel? >> we were always concerned about disruptive innovations. things that could occur that -- constantlyly looking over your back. at dell we learned about being in touch with the consumer. how could you provide them? those are the things that we have applied to polar and. >> what do you do with the tablet? >> this is one of our best categories.
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we call it mobile. we are addressing the mom who once parental controls and preloaded apps that are safe and pretested. it comes with 70 apps. we have done deals with disney and cartoon network. they know what is coming and they can check it and protect it. tablets are about giving people the ability to instantly share those memories digitally. you are leaning back and enjoying the content. it is a polaroid is about. >> how big is polaroid today? >> we are privately held right now. we are rapidly going. two thirds of our sales are outside the united states. >> where? the u.k., france, and mexico. we are having phenomenal growth. those are markets where we have great strategic hardships in
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place. we can fulfill and serve the marketplace and address consumer needs. >> five years from now? >> we are on track to double what we are currently doing. months, we have distributed more dividends to our owners then had been done over the prior decade. it is a successful turnaround story. >> congratulations. thank you so much for joining us. hackerswe come back, take aim at hedge funds. you will find how the industry is fighting back. ♪
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live from bloomberg headquarters in new york, this is "market makers." with erik schatzker and stephanie ruhle. >> hackers go after hedge funds. ofy have stolen millions dollars on wall street is officially fighting back. >> at&t says, don't believe what you hear. our takeover of directv will actually save you money. >> how to pamper yourself on the ground before you get stuck in the middle seat at 30,000 feet. welcome to "market makers." i'm stephanie ruhle. erik schatzker.
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it's good to be back. we had that really interesting conversation with polaroid. >> great to hear it is reinventing itself. now we have to get a little less fun and get to the top news stories. apple will start mass production of its biggest iphone yet next month. one of the funds will have a 5.5 inch screen. two-putted in perspective, the current iphone screen is just inr inches -- to put it perspective, the current iphone screen is just four inches. if you like betting on long shots, you should have applied for a summer job at morgan stanley. there is that 90 to one chance you could get hired hipsters. receives more than 90,000 applications for its summer program for associates and analysts. more than 1000 people were given jobs.
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check the numbers. millenial's do want to work at banks. vladimir putin is sounding a conciliatory note. putin is traveling to vienna where he will meet with european officials for peace talks. the s&p 500's and the dow jones keep getting records. how far and for how long can this bull market last? chris, it is great to have you here in new york city. >> great to be here. >> are we ready for a correction? >> i thought it was time back in march. i thought it was time in may. if you look historically at markets, they typically have a year% bull market in her -- inner year.
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we went to record highs throughout may. >> what explains that? it is not just that u.s. stocks keep hitting record highs. it is that the keep hitting record highs at a time of unbelievably low volatility. >> and unbelievably high valuation. >> people are scared. >> this is the calm. what is the storm going to look like? >> if we saw a storm, it would be a typical kind of selloff. 2008 seems like very recent memory. valuations are high. on the ratio,ses but when you look at trailing earnings, it is fairly rich. staying on the market wave within the market. we will take profits as they keep going to highs and then when we get a dip, we will reallocate into equities. we think it is steady corporate
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earnings. you are seeing merger monday comeback. that is healthy in the economy. i'm amazed at the morgan stanley number. i didn't think people wanted to work at wall street anymore. they want summer intern jobs. >> at big banks. pe firms are selling. should that be a warning> >? >> that is a sign the multiples are up. if you look at the function of the nature of the pe market, so much of the bubble of the pe market is 2007. those funds are maturing. , inowever, the same firms particular the large firms, keep raising money. they have a large money -- a large amount of money. they have a lot of dry powder. like yours keep
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giving the money to spend when you don't want them to be spending money. >> you don't want 18 times earnings. i don't want them to shape returns. is private equity investing about half the pace it was in 2006-2007. we want to scale. we want to be time diversified. the new money they are getting, it is interesting. is coming from funds who want to build a private equity portfolio. steady statety investor. >> does it scare you that more retail investors are having more opportunity to invest in pe firms? it was not like this a few years ago. retail is playing pe. is that scary? industryivate equity has been wanted ways to gain access. they want capital.
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they see the prime benefit equity -- prime benefit plans as few and far between. >> these are not going to be him like -- behave like institutions. when a retail investor makes an investment, he does not want to wait three years for blackstone to put that to work. he wants it done now. rode thehat he discipline that has been the hallmark of private equity firms since its outset? >> when you look at the terms the retail investor is going on, they don't have control of the private equity firms. we are gauging on them to make the decisions. the long-term alignment of interest with the retail investor, that is what is critical. friend about that? no. i think it is the natural evolution of the market. i'm worried about them being adequately sophisticated to understand what they are doing.
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any decent, worthwhile investment as a long-term investment. you don't make things by short-term profits. you have to have long-term commitments to get a steady return. >> sure, we know that, but look at all of these investors chasing after tech stocks. human we have a 20 year investment horizon. i can afford to be patient, make long-term investments. we havehistorically why had that solid, steady return over 7.5%. >> it is not exactly the latest idea. but it has renewed popularity. the tax in version deal. one of the fascinating things about talking to you is you need to balance -- you have to balance the need for investment return with something akin to social purpose or social good. >> we care about sustainability. >> how do you do that? >> in 2003, tax evasion was a critical issue.
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it has been a long time, but it has come back again. >> we call a tax avoidance, right? >> which is not against the law. >> but we are talking about what is socially good, the right spirit area that ain't it -- right spirit. that ain't it. >> that is where it gets very tough. environmental, social, government. -- governments. the social stuff is very tough to gauge. it is about good ethics and acting proper as a company. when is it tax avoidance versus trying to minimize tax position. >> how do you feel about medtronic? rs owns shares. >> we hold the board accountable for making proper decisions and being ethical about their
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actions. they should be embarrassed when they are making those kind of traits. >> hang on a second. just to be clear. are you specifically making reference to medtronic? >> just in general. >> when we talk tyson, he'll sure brand, these massive hireers -- hills brand, these massive numbers. meats are notge good for anyone. sugar is the new nicotine. where do you fall on investing in these types of food companies? >> that is when you get into the social slope. it is very slippery and tough to figure out. salt. i saw the headline. butter is no good for us. so where do you start? very interesting. you are very focused on high fructose sugar. look at americans, you are both
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very much in shape. i know you have been modeling. all kinds of fit bits and all that. fitness has got to be critical. we saw a panel on longevity. the average person is easily going to be up into the 90's. my dad just turned 96. >> hey, hey, happy birthday. >> there you go. we are all going to live longer and want to be healthier. or us, it is a matter of long-term investment. you cannot just get mad at the meet company for the food company. company or the food company. mcdonald's is a good idea. it is an idea of modifying behavior over the long-term. >> how do you do that? longevity is coming as a result of miracles of modern medicine, not because people are getting healthier. we are not getting healthier. >> no.
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the average american is not healthy. for us, it is a matter of engaging the boards. it is about trying to get a board that is diversified. we want to see more women on board. >> how do you get boards to do that? get them thinking about diversification? whether it is by razor by gender? >> short-term -- race or by gender? >> short-term, that is one of our biggest problems. they're so worried about corporate earnings, they do not look at the long-term. >> what is the holdup on the whole women on boards thing? company hadt, if a an all-male, whiteboard over the age of 62, the media is going to kill them, you are going to kill them, what haven't they changed? >> they claim they cannot find qualified candidates. we say, balderdash. >> do you help them do that? >> we do.
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we feed to the executive recruiting firms. i was on a conference of bloomberg. you are both there. womanto get the qualified to step up and help each other. they are out there. >> are there enough women in positions yet that they are qualified? there are a ton of women in middle management. you need to be an executive committee member to get chosen for aboard, though. you need to be on the management board. us all is what ceos tell the time. it is an easy answer. >> you just have to reach down. i am pleased to say we announced two ladies, my deputy chief investment officer and director of global equity are both women and stepping into the roles next week. for us it is a matter of reaching down into middle management. >> before we have to run, give us the name of a public company that is doing this well.
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we beat up on companies all the time. who is doing it well? >> that is what i think we need to do more. i can't give you a name of anybody. there are several firms we have been pleased with. you cannot just add one woman. you have to add two or three. >> it is also racial and ethnic diversity. >> canadians. [laughter] >> you have to draw the line somewhere. >> a token canadian is ok. >> we talked about sustainability. women tend to think longer and more holistically. attitude and a perspective to the board room that we need in corporations. >> always great to see you. >> wonderful to see you. >> always. >> the chief investment officer at calstrs. >> coming up, wall street playing defense. hackers who were targeting hedge funds and making off with millions. thet&t's argument on
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takeover of directv. customers bills getting smaller? this is "market makers." we are digital, everybody. go find us. ♪
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>> welcome back. hackers are targeting hedge funds. there was an attack just last network. one fund's just one of the many recent hacks. it is a troubling issue for the financial sector as a whole. threat isscuss the ken benson, the president and ceo of the securities industry and financial markets association. welcome. security and the threat of a cyber attack is one of our industry's number one priorities. this is a growing threat that the industry is spending a great deal of time and money to
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prepare for and defend for. to theally goes integrity of the financial system in the united states. we know that there are an increasing number of attempts to infiltrate the financial system by several criminals. -- cyber criminals. there are potential risks from terrorist groups as well, or others. this is a top priority. it is something we need to work closely within the industry, and we are, and also with regulators. >> is the fix for this issue the. secure proposal? you could have a secure domain that would apply to the financial services industry? >> i think it is bigger than that. >> is that a step toward it? >> that can be a step. technology can be a step. it is more than just that. it frankly goes beyond
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technology, even to the power sector. what are we doing to connect the power grid? if you do not have power, what do you do about that? it is a holistic approach that we have to take, not just to defend against an attack, but also to have and be prepared to do with the recovery, if and when there is an attack, if we have to close the markets. how do we stand them back up? within been doing a lot the industry and with regulators and we have elevated it to a much higher level and need to do more with the government. >> what do hackers want? out?ey want to pull cash do they want info? whohe motivations depend on the hacker is. in some cases, we know they are people trying to get into it information to sell that information into the broad public. others want to steal money. what we are particularly concerned about -- and those are are those who come
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in in a very malicious way to destroy information. if you are trying to destroy how do werecords, protect against that? our concern is not just those who are looking to steal, but those who are looking to really bring a devastating attack on the united states through the financial services sector. do you have any idea how many other hedge funds have been attacked or whether they are even aware of the fact that they have been hacked? >> that raises an important question and something that congress needs to address and that is the sharing of information. portalsve information within different sectors, including financial services. liability protection,
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which congress needs to pass. we are seeing movement on that this week. concerns whenacy they are sharing information among different firms and sharing information with the government. rightfully so. there is client privacy and the trust they put in us. but if we have to share information that a firm is being attacked and that information could get to another firm or that we want to share with the government and have the government share with us, we need protections so we can have that two why communication. theow underfunded are protections? >> the industry is spending a tremendous amount of money. >> the industry is? >> but we need better protocols with the government and the industry. we cannot do this alone. the government cannot do it alone. it is something we need to do a jointly. it is something we are working on. >> the government needs to tweak the safeguards that are in effect for the safeguards of privacy?
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>> the government has tools the industry does not have, but there also has to be clear communication with the industry. particularly if we get into a situation that involves the markets. government needs to be involved. if we have to close the markets, when we should reopen the markets? it is a two-way street. >> some of your member organizations want to share more information. understand that there are those who are terrified of the idea of the government sharing more information. >> nobody cares more about privacy -- >> they might be terrified to find out what the government knows. >> know because more about privacy than the financial services industry. but we have to find the right balance so that we can defend against these attacks, and recover if there is an attack. there is no question about it. it is something we are working on an something we will continue to work on. it is a top priority for our
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industry. we are putting tremendous effort behind this. we view it as the next big risk. >> thank you so much for joining us. tent.hen -- ken bensen >> you can still get first-class treatment at the airport. ♪
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>> coming up, at&t says you could be the big winner of its acquisition of 8 -- directv. now they just have to convince congress of that. >> the glamour of air travel may be gone. but that does not mean you can't on theel -- pampered journey. we are talking about airport
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spas. this is "market makers." ♪
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>> live from bloomberg headquarters in new york, this is "market makers." with erik schatzker and stephanie ruhle. >> welcome back to "market makers." >> it is 11:30 in new york city. >> indeed it is. time for us to talk about a $48 billion takeover of direct av by at&t. it is under scrutiny on the hill today -- directv by at&t. it is under scrutiny on the hill today. >> there was no significant competitive overlap between at&t and direct tv in the product that consumers are overwhelmingly demanding and
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that is a broadband video bundle. the consumer benefits to this transaction are significant. directvle to offer nationwide is a game changer in terms of the economics for deploying broadband. megan hughes is on capitol hill news now and bloomberg media reporter alec sherman is here to break it down for us. macon, let's start with you. what are lawmakers concerns -- megan, let's start with you. what are lawmakers' concerns? >> there is a lot of concern about what we are seeing across the board in the communications industry. one thing to point out that we heard from stevenson, he is mentioning that there is not overlap when it comes to bundle services. it is the key phrase here. when you hear from the opponents, they say, randall that weon's argument is are strong and broadband and
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directv is strong and pay tv and these two things complement each other. opponents say at&t is in pay-tv as well and that is their big case. be a big hit to competition when it comes to pay-tv services. that is the back-and-forth we are hearing. have a general concern about the landscape across the board with telekom. >> one of the interesting things about what is being said today in congress is the push toward the idea that consumers really want a bundle of all services. if you are a cable subscriber, you probably already get your landline, phone, broadband all-in-one. at&t-directv is pushing this wireless tv bundle together. you just heard randall stephenson. this bundle that consumers want. there is no evidence that consumers want this. the radically, you might want this if the cost would go down. that is what they are pushing.
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-- theoretically, you might want this if the cost would go down. that is what they are pushing. >> hold on a second. the people want to bundle? it seems like people would want à la carte. most people have pay-tv in the home and a wireless plan. putting those two together does make some sense. if you're able to pay less for it, then great. but some of the other services, goingr point, maybe our away. most people do not get standalone tv today, particularly from at&t. most people get the bundle and that is what we should be talking about. i remember talking to time warner cable ceo who recently passed away and he said time warner cable used to look at this year after year after year and they saw no evidence that customers really wanted their smartphone and their tv service on the same bill. interestinge other
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things that we have been hearing in the hearing today from the directv ceo michael white is that directv is offering synthetic bundles. broadband is provided by a separate provider and a lot of the complaints that it -- they have been hearing are a lot of -- about dealing with two different providers with the synthetic bundle. , actuallyeir case sort of undermining some of their business credibility with the synthetic bundles, which is pretty interesting. >> do hearings like this just give lawmakers a chance to channel -- >> ha ha ha. ' concerns?s >> let's be clear. the chances of this going through are quite high.
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these two companies do not really compete with each other. from an anti-competitive benefit, you have to stretch to make a very good benefit -- case. they are going to be all over the map with questions. one senator said my constituents in virginia cannot get the local affiliate station through directv. that doesn't have anything to do with this merger. >> the issue is those people in congress to not understand what is happening. that is a big concern. >> it might be grandstanding or they don't understand. i'm not sure what is going on on that end. >> they're wasting someone's time. they mayis a chance not understand the new wants is -- that is quite high. that one ofr to say the reasons at&t wants to do a offerike this and customers bundled services is so that it is harder to go à la carte. at&t might offer you a great deal to have a bundled service
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with directv and at&t broadband and this that and the other thing. but if you want to just a simple broadband connection, it will make it harder for you to get netflix and whatever all a card services that you might like -- à la carte services you might like. >> it is probable that directv wants that. the ecosystem these companies are in revolves around a bundle of pay tv services. they make money off of it by bundling it in with everybody else. >> if you try to parse it out, are you going to get screwed? >> what are you parsing out exactly? if you want the services individually from each other, which is what directv and at&t, that is exactly what they have now -- then you're going to lose money. in a sense, this is hoping consumers. >> thank you so much for giving us the latest.
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megan hughes and alec sherman. >> coming up, on the highway to another fiscal cliff. roads and bridges. we should be concerned about this one. ♪
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>> congress is facing a big deadline this summer. one that is looking less and less likely to be met. road construction is about to run out of money. sendsghway trust fund almost $35 billion to states. warning that now the u.s. is approaching a transportation fiscal cliff. phil mattingly has this report. >> so what you have is for sets of columns, all of which is varying degrees of damage. >> the columns of the 40-year-old bridge were tilting.
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the state moved fast. it shut down a roadway used by 90,000 vehicles per day. within 10 days, workers installed braces to support the columns. >> bottom line, no one was injured, now we have to get it back open. emergency repair cost 2 million dollars. $18 million more are needed to open the job desk -- finish the job. >> we have projects all over the state that depend on the federal funding. if that federal funding dries up, we may have to stop the projects. >> the federal highway trust to $8 billion. it could be drained by late august. one reason short -- for the shortfall, the federal gas tax has been stuck at $.18 per gallon since 1993. >> this is a national issue. >> anthony foxx says unless congress acts quickly, states
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will suspend summer construction plans. late are expecting a by june, middle july, some states will already start to pull projects and slow to -- projects and even stop some. utah toa low of 35% in a high of 98% in rhode island, these companies -- states rely on federal funding. 67,000 bridges are rated as structurally deficient in the united states. >> there is an infrastructure deficit. it has been estimated in the trillions of dollars. even we areis that at her most aggressive, we're just dying to get the funding levels back to where they were last year. >> phil mattingly with us. what is not going to happen is a comprehensive fix for the highway trust fund between now
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and the november election. what my congress do in the interim to deal with this? it is going to be a problem if they don't. >> a huge problem. as many as 6000 construction projects being shut down. that is a lot of workers. it is all about the short-term patch, as it has been, largely for the last five years. in the senate, the senate democrat finance chairman introduced a proposal to try to find some sort of six-month patch. the cost, $9 billion. that number is the big problem. they have to figure out a way to pay for that. the proposal is not bipartisan. but they will try to move it on thursday. house republicans to not like this issue. they are not happy but a $9 billion price tag. a couple ofpatch in weeks and we are still largely at square one. newswish you had better
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for us. our own phil mattingly from washington this morning. have goodup, i will news. how to get treated like a ucks at the airport even when you're traveling on a discount fare. stay with us. ♪
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>> welcome back to "market makers." airports to not generally conjure up soothing and relaxing images. with the summer travel season kicking off and 66% of americans expected to take a leadership -- leadership, a littler -- leisure trip, a little was then is needed. needed.s just last week, i was at the airport, i was miserable and depressed and then him a eureka. >> i can't believe you are depressed. you are the most un-depressed person i have ever met. >> cancellations kill us.
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delays, we like delays. human not like it. -- you may not like it. you come to take a flight. it is a destination. if you are going to a shopping or get a manicure, it is raining, windy, snow, canceled. airport, you cannot miss the plane. you go to the airport no matter what. you will go two hours ahead of time. you go to security. you take your watch off come your shoes off, by the time you get inside, you have all this time because you left so early and i you have all of this free time to spend. >> most people would admit that he or she likes spot service -- spa service. you havehe research done show?
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what stops more people from walking into the express spot? a? >> you do not expect to see a spa in the airport. what is that? need visual. you have to be very visible. brand is the strongest thing in the airport. pa, you did not ask for coffee, you ask for starbucks. we need to brand. >> how do you keep your exclusive status in the airport? >> two things, you sign a long lease with the airport. you're talking about competition in your lease. you're going to sell pillows next to the guy next to us. spas, want to open more
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in jfk, we have seven xpresspas. docompanies -- how many spas you have open? >> 55 spas. at 70.t year, we will be we have leases to build for next year. we are branching into europe. we have three in amsterdam. we are going to dubai, heathrow, and copenhagen. >> how about train stations? >> no. that is a little too fast. we want you to slow down. emeril.cross a -- we want you to take it down a notch. we want you to go the other way. [laughter] >> what is your revenue from air
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passenger traffic? >> 100%. there was a word called enplanement. you are going to get a percentage of the enplanement. people who are getting off are gone. it is the people who are getting on the plane. >> do you like to see cheap airfares? >> i think -- one, yes. the answer to that in-depth would be, i don't think you can really have low price airfares because my son loves jetblue, but he would rather spend his money on a hotel or a good meal. he uses the airplane as a bus. >> does the frustration people have for tsa help you get more customers. is that a homerun for you? >> yes. and they are going to come earlier and earlier.
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the more it frustrates you and makes you crazy, taking your watch off for your shoes or your gold plate in your head from the war. somebody holds you up, you get crazy. >> and you are there with open arms. thank you so much for joining us. we will be back with more "market makers." ♪
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>> that is going to be at for "market makers." i could use a massage. >> tomorrow, you will want to
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choose in. the clinton global initiative taking place in denver, colorado. we will have exclusive coverage. conversation with former president bill clinton will be happening right here. >> bloomberg television is taking you on the markets. julie hyman has more. >> thank you. stocks are rising just a bit today following those reports that new home sales rose by the most in 22 years and consumer confidence was up in june. joining me for the options insight is mark sebastian, the chief operating officer of the side with activity one could call it over the past couple of weeks that we have seen in stocks, sideways to slightly higher generally, what is the read in the options market? the vix remains relatively low. are we seeing any kind of options activity that is interesting on the various etf's? >> yes.
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one of the things to recognize is that in a really low volatility market, which is what we are in, we are in a historically low volatility market, the last 21 days have been the slowest in terms of volatility for the s&p 500 in the last 10 years, when we are that slow, you get these little explosions of activity. last week we saw that in utilities. when consolidated edison was seeing massive call buying, upside call buying and speculation. now we are seeing that in ford today. all kinds of activity in ford today. yesterday, it was first solar. traders are desperate to find somewhere to make money. >> let's talk about ford for a second. it is interesting. it is not that there is any particular news here. ford, we're going to see general auto sales up from ford and the
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other automakers out next week. is that enough? are people grasping at any kind of catalyst? theory on the utilities last week was that it had something to do with the supreme court decision last week -- night. we saw a traitor by -- trader b uy 36,000 calls. all right behind that auto sale announcement. as a look at what is going on afford, i am starting to wonder -- at ford, i'm starting to wonder whether there will be really good news for ford auto sales. activityou see big like that, is that something you try to piggyback on? do you say, what does that guy know that i don't know? do you execute a similar trade? >> absolutely. i bought a little ford. you caught me. i see someone by the calls and
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in a slow enough market and that kind of volume, that will throw the whole option market out of whack. i might try to sell the 17.5 and underneath. that is what i was doing this morning. i have been selling the 17.5's against it and create a call spread. >> i want to talk about first solar as well. there's been a lot of news in solar industry generally. it has been a little bit of speculation about first solar and what its future is. are you trying to capitalize on them? >> yes. expiring, the june this week absolutely exploded. volatility went from the low 40's up to over 55 and now it is back to 50. that is till elevated. volatility -- that is still elevated. volatility gets completely thrown out of whack. is going tot solar
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trade higher. do is on friday when probablyis expiring, worthless, i will buy back the june and sell the week he hind it against it. -- sell the week behind it against it. >> we will be watching those traits come afford, first solar. "money clip" is next. ♪
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>> welcome to "money clip" where news.d together business i am adam johnson. it is alan mulally's final day as the ceo of ford. he talks about his future. what happens when a massive infrastructure fund runs out of money to repair america's roads? to find out. hank paulson has a new call to action. and harley davidson is doing its part in this call to action. the maker of


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